New DHS Regulations for EB-5 Will Have Wide Ranging Impact
The U.S. Department of Homeland Security (DHS) finalized regulations which may upend the EB-5 investor visa program. The rule, which increases minimum investment amounts in TEA areas to $900,000 from $900,000 and all other areas to $1.8 million from $1.8 million, will go into effect on November 21, 2019. The adjustments to the minimum investment amount reflect changes in the Consumer Price Index since 1990, with further adjustments to take place every five years.
There are a few changes to EB-5 outside of the investment amount that are also very important for investors and the EB-5 community to understand:
Shift to DHS Defining TEAs
The new regulations allow DHS to classify TEA areas, no longer allowing individual states to define the areas. This change is intended to bring more uniformity to the TEA definition, as DHS has found that states apply varying strategies to fit the TEAs in their state to the state’s needs.
We expect that DHS will look to apply more stringent criteria when defining a TEA moving forward. DHS is going to limit TEAs to adjacent census tracts, ensuring that a particular regional center can’t cherry pick multiple adjacent census tracts most suited to its own TEA needs. TEAs will continue to require unemployment at a rate above 150% of the national unemployment rate.
DHS also clarifies the definition of “rural” for TEAs, explicitly defining this as an area that falls outside any Metropolitan Statistical Area (“MSA”) or a town or city that has a population of fewer than 20,000 people.
Allow Priority Date Retention
The new regulations account for EB-5 petitioners who may have to refile to avoid processing delays due to circumstances beyond their control. Investors who have already filed will not lose their priority date due to something like a change in the underlying investment project, but may have to increase their investment to $900,000; this is not clear yet.
Revise Permanent Resident Application Process for Family Members
Dependent children of EB-5 investors who turn 21 or who get married before the filing of the I-829 petition will now have to apply independently to change from conditional permanent resident status to full permanent resident status. This change will make the EB-5 process conform to updated USCIS processes for green card issuance. Filing of the I-829 petition includes a $3,835 fee, which will now also need to be paid by the dependent child in these cases.
The new rule doesn’t provide any further clarity on calculation of children’s ages. In some cases where children have their ages frozen under 21, under the Child Status Protection Act, there can be some questions about this calculation.
Set Regular Investment Amount Adjustments
The new regulations will set a 5 year schedule for adjustment of the TEA and non-TEA minimum investment amounts.
Change Enterprise Management Rules
The new rules clarify who can act as a manager in a project, replacing historically vague requirements with more concrete stipulations. Under the new rules, a petitioner can show that they act as a manager either by demonstrating that they “exercise of day-to-day managerial control” or that they are actively engaged in the enterprise’s policy making.
The new rules clarify that a petitioner may be categorized as being engaged in policy making if “the petitioner is an equity holder in the new commercial enterprise and the organizational documents of the new commercial enterprise provide the petitioner with certain rights, powers, and duties normally granted to equity holders of the new commercial enterprise’s type of entity in the jurisdiction in which the new commercial enterprise is organized.”
All of these changes will go into effect as of November 21, 2019. Given that, anyone thinking about immigrating to the US via the EB-5 program should begin work on this process immediately, if feasible. EB-5 petitions that are filed before the new regulations will have access to the current rules, including lower minimum investment amounts of $900,000 in a TEA and $1,000,000 outside a TEA.
If you are interested in reviewing your case and starting your EB-5 petition, please reach out to Mark Ivener at firstname.lastname@example.org.